Original Author: Sam Broner
Translated | Odaily ([@OdailyChina](https://x.com/OdailyChina))
Translator | Ethan ([@ethanzhang_web3](https://x.com/ethanzhang_web3))
Original Title: Three Steps Ahead: How Far is the Path from Stablecoin Normalization to Becoming Currency?
Traditional finance is gradually accepting stablecoins, and their market scale continues to expand. Stablecoins have become the optimal solution for building global financial technology due to their three core advantages: high speed, near-zero cost, and high programmability. The transition between old and new technological paradigms means that business operation logic will undergo a fundamental reconstruction, which will also generate new types of risks. After all, the "self-custody model" priced in digital bearer assets (rather than deposit accounting) fundamentally differs from the banking system that has continued for hundreds of years.
[Rest of the translation continues in the same professional and accurate manner, maintaining the original meaning and tone while translating to English]However, anti-money laundering, anti-tax evasion, and anti-fraud tools at the level of correspondent banks and international payments remain obstacles for stablecoins. Although stablecoins operate on open programmable ledgers, making security tools easier to develop and build, these tools need to be practically implemented—providing entrepreneurs an opportunity to integrate stablecoins into existing international payment compliance systems.
Unless sovereign nations abandon valuable policy tools for efficiency (extremely low probability) or give up fighting financial crimes (even lower probability), entrepreneurs need to build systems that optimize the integration of stablecoins with local economies.
The core contradiction is: how to strengthen safeguards (such as foreign exchange liquidity, AML regulation, macroprudential buffers) while embracing technology, and achieve compatibility between stablecoins and local financial systems. Specific implementation paths include:
Localized acceptance of USD stablecoins: Integrate USD stablecoins into local banks, fintech, and payment systems (supporting small, optional, potentially taxable exchanges), enhancing local liquidity without fundamentally disrupting the local currency;
Local currency as a deposit-withdrawal bridge: Launch a local currency stablecoin with deep liquidity and deep integration into local financial infrastructure. Although it may require a clearing house or neutral collateral layer to start (refer to the first part), once integrated, the local stablecoin will become the optimal foreign exchange conversion tool and default high-performance payment track;
On-chain foreign exchange market: Build a matching and price aggregation system across stablecoins and fiat currencies. Market participants may need to hold interest-bearing instruments as reserves and support existing foreign exchange trading strategies through leverage;
Western Union competitor: Construct a compliant offline cash deposit-withdrawal network, incentivizing agency institutions through stablecoin settlement. Although MoneyGram has launched a similar product, other institutions with mature distribution networks still have opportunities;
Compliance upgrade: Optimize existing compliance solutions to support stablecoin tracks. Utilize the programmability of stablecoins to provide richer, real-time fund flow insights.
Expand collateral types and tokenization: Broaden the range of acceptable collateral (municipal bonds, high-rated corporate notes, MBS, real-world assets), reduce dependence on a single market, provide credit for borrowers outside the US government, while ensuring collateral quality and liquidity;
Enhance liquidity through on-chain collateral: Tokenize collaterals such as real estate, commodities, stocks, and government bonds to build a more diverse collateral ecosystem;
Collateralized Debt Position (CDP): Adopt the DAI model of MakerDAO (using diversified on-chain assets as collateral), dispersing risks while recreating bank monetary expansion on-chain. Such stablecoins need to undergo strict third-party audits and transparent disclosure to verify the stability of the collateral model.
Conclusion
Although challenges are immense, opportunities are even greater. Entrepreneurs and policymakers who understand the nuances of stablecoins will shape a smarter, safer, and more optimal financial future.
